Invictus Energy (ASX:IVZ) is a junior miner focused on high impact energy resources in sub-Saharan Africa. The Company has been garnering quite some market attention since a few months, due to its first mover advantage in the Cabora Bassa Basin in northern Zimbabwe- potentially the largest, seismically defined, undrilled hydrocarbon structure onshore Africa.
IVZ’s Dominant Acreage Position in Africa
Unveiling the largest discovery in almost four decades and tapping the lucrative largest undrilled prospect in Africa, IVZ secured an 80% interest in the Cabora Bassa Project via its subsidiary Geo Associates (Private) Limited. The Project is a gas-condensate exploration one, with good potential for oil in its acreage.
Operator of the SG 4571 Asset where the licence area covers 250,000 acres in most prospective part of the basin, IVZ was granted the acreage in August 2017 for initial 3 year period (renewable). The acreage, however, had previously been identified by regional aeromagnetic surveys and showcased thick sedimentary sequences within the rift basin.
In the 1990s, Mobil, overwhelmed by the size and potential of the acreage, identified and later mapped the gigantic Mzarabani Prospect, which possesses following attributes-
- Over 200km2 under closure
- 500 m vertical relief
- Apropriate depths for conventional oil and gas with TCF+ potential.
However, as Mobil did not proceed to develop the Project due to its focus on oil producing assets to satiate Africa’s energy crisis, IVZ took over to leverage its first mover advantage and a dominant acreage position in the Cabora Bassa Basin. A low-cost, huge-impact work program was commissioned to progress the prospect (to farm-out or drill ready).
What’s Working in IVZ’s Favour?
The first answer to the above question is simple yet significant- Timing. IVZ’s opportunity only gleamed more with Zimbabwe’s new President Emmerson Mnangagwa becoming hospitable to foreign investment and declaring Zimbabwe to be open for business, particularly in the resources sector.
It should be noted here that Africa is facing a power crisis and has a dearth of robust domestic energy security. This is propelling the region to adopt gas as an alternate energy source to coal, creating a strong demand in the domestic and regional markets.
Besides this, IVZ has the guidance of Dr Stuart Lake (Non-Executive Chairman), a proven oil finder with a track record of 272 discoveries from 300 wells drilled (90% success rate).
IVZ’s Accomplishments at the Project
In FY19, IVZ made significant progress in progressing the development of the Project, delivering to its strategic goals-
- Reprocessed the entire gravity and magnetic dataset covering the whole of Zimbabwe, confirming a basin extent and intra basin structural highs.
- Reprocessed 650 line kilometers of seismic originally acquired in the early 1990’s, confirming a considerable uplift and improved imaging, enhancing the Company’s understanding of the prospectivity.
- Initiation of EIA; EIA study was further completed in the December 2019 quarter (to be submitted to EMA in the coming days for approval)
- Opened up its in-county office in Harare, hired a local staff member to support and communicate IVZ’s efforts on the ground.
Subsequently, the growth story of the company continued with following results-
- Recently, in the December Quarter, IVZ announced results of new geochemical analysis of source rocks, confirming the presence of at least two source rock facies in the Mkanga Formation and the Angwa Alternations Member
- The Company signed its second MoU with Tatanga Energy (Private) Limited to progress gas supply for a ±500 megawatt (MW) Gas to Power plant. The first MoU was with Sable Chemical Industries, to supply up to 26 Bcf of gas per annum for 20 years.
- The Company successfully completed a well-supported placement of $1.5 million to advance the Project, complete the EIA study, consultations and report, Environmental Management Plan fee, licence ground rental fees and begin preparatory works for the on ground exploration phase.
- Interestingly, IVZ has progressed the farm out process of the Project with several companies, which has attracted E&P companies as well as Private Equity companies focused on upstream investments.
IVZ last traded at $0.019 on 3 March 2020.
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